Second quarter presentation for Zaptec. My name is Anders Thingbø. I'm the CEO of Zaptec. My name is Kurt Østrem. I am CFO in Zaptec. Before we go into the numbers, we would like to just give an overview of the company as it looks by the end of the second quarter. We have installed in total 70,000 chargers. We have a total of six sales companies in Europe. If you include the order backlog, by the end of second quarter, we have a revenue growth of 100%. In the markets where we operate, we are going for double-digit market share. In Norway, it's 50%. In all the six countries where we operate, we are going for the same, and at least the double-digit market share. As we have installed a lot of Pro systems previously, we have prepared a lot of parking bays, 250,000 parking bays for future revenues. This is a more secure revenue stream in the future for Zaptec. We are about 65 employees in the company. The highlights for the second quarter, strong revenue growth, 95%. The total purchase orders, 150% growth. The backlog by the end of the quarter was NOK 26 million, represented an estimated EBITDA of NOK 10 million sliding into the third quarter. We have improved the gross margin from the first quarter as planned, we see a favorable macro conditions in the EV market. All the markets where we operate have a strong EV growth and EV adoption. The export share is increasing quarter by quarter. We have all in all during the quarter increased the competitiveness of our product range. That is the highlights for the quarter for the company. We would now like to go into the numbers. The revenue in the second quarter was NOK 92.1 million. This is an increase of 95% from the second quarter last year. Addition to this, we had an backlog of sales order for our Zaptec Pro in the end of the second quarter, and the total sales order for the second quarter was then NOK 118 million. This is an increase of 150% from the second quarter last year. The export share also continued to increase and was 41% at the second quarter. This is up from 24% last year. The gross margin was 35.8%. This is slightly down from the second quarter last year, this is as expected due to the production ramp-up of our new product Zaptec Go and the introduction of new version of Zaptec Pro. Still, we managed to increase the gross margin from the first quarter by 2.5%. We expect the gross margin to increase also in the third quarter. We expect to reach our goal for 40% gross margin at the end of the year. The adjusted EBITDA was NOK 11.7 million. This is up from NOK 9.2 million, they give us an EBITDA margin of 12.8%. If you manage to deliver the backlog of Zaptec Pro, the EBITDA would have been increased by NOK 10 million. We have still a very strong available liquidity, this was NOK 286 million at the end of the second quarter. Very good. The EV markets, as you can see on the right-hand side in the Nordic countries and Switzerland, is very strong in the second quarter. As you can see, Norway and Sweden especially has a very strong absolute numbers in the new EV car sales. Also we see Denmark increase month by month. Of course, Switzerland is also strong, but not so strong if you compare it to the Nordic countries. We expect this adoption and the shift from fossil fuel cars to electrified cars to continue in all these markets going forward. The markets where we operate, we see a very strong growth in the EV adoption. For U.K. and Germany, where we have established companies to sales companies with a very strong local management and top industry professionals. You can see on the right-hand side, especially Germany selling 150,000 + cars being electric in the second quarter. This surpassing Norway, all other markets when you talk about absolute numbers. Germany is definitely the most interesting market for charging and electric vehicles in Europe going forward. Mainly it's due to the domestic car producers. They are doing the shift from the old fossil fuel cars to new electric models. I would say also U.K. is growing quite fast. We will start selling in the U.K. faster than we do in Germany. We have five top industry professionals in the U.K. wrapping up. We are training the electricians in the U.K. at the moment, and we expect sales to be picking up in the end of this year. Maybe a little bit later in Germany since we have a more in-depth preparing for sales in Germany. The requirements around products and being compliant with all the laws and regulations is a little bit more strict in Germany. For the next year, we expect quite high sales in Germany. On the right-hand side, you can see the export sales as a percentage of the revenues has grown from 20% in the first quarter of 2020 to 41% in the second quarter of this year. As we have mentioned, it's the Switzerland and the Sweden, Denmark, and Iceland are the largest countries in addition to Norway, of course. We are able to get into new markets with the Pro system quite fast, but it takes six and nine months before we start until we see the revenues coming in. We go for the most interesting EV markets in Europe, not the smaller ones. It's the bigger countries now increasing the number of EVs in Europe. Spain and Italy is lacking a little bit behind, but France, Germany, and the U.K. is really pushing forward with high numbers of electric vehicles. In the quarter, we installed over 1,000 Zaptec Pro systems. On the slide, you can see is 119% growth from the second quarter last year, not the first quarter last year, where we had 493 installations. A typical Pro installation is, say, 5%-10% of the parking bays are equipped with a Pro charger, and the rest is a future revenue potential for the company. This is also something that we see working at the moment. As we mentioned, we have an order backlog, the delivery times is a little bit higher at the moment. It's about four to six weeks now for the Pro. Normally, it's two days. We see the order intake is still increasing a lot. The model really works. It's not easy, it's not possible to buy another Zaptec charger or another brand to put into a Zaptec Pro system. This is very important to understand that it's a professional system. It's large complexes and buildings being equipped with Zaptec infrastructure, securing the revenues for the company going forward. We increased the number of contracts for the automatic payment. Charge365 is the company that we own 100% that provides this service. In all together, it's about 1,000 contracts, multi-family homes, office buildings, where all the users can automatically settle the bill in this system. It's really a value-adding service for large complexes to settle the bill for all the different charging sessions in the building. This is an automatic service. We have not been very active in selling this service. It's more like incoming orders. We need to build the back end even better before we internationalize this service. This is what we are doing at the moment. The number of active users is about 20,000. Yes? Yes. During the second quarter, our development focus had been on implementation and production ramp-up of the Zaptec Go. We have also in the quarter start production of the new version of Zaptec Pro, and the production of or ramp of the new Pro version was slightly delayed mainly due to challenges in sourcing of components in the second quarter. We have a production stop for three weeks for Zaptec Go. Zaptec has solved this challenge by placing long-term orders with our supplier, and production started again late June and is now on track. Our software technology have continued on development and implemented various software updates improvements. The focus had been on the Zaptec Portal, our cloud solution, and the back-end system and the front-end system, as well as the customer-facing apps. As a summary, the production range is now more compatible. To handle the challenge in the components market, we have placed orders to secure a very strong revenue growth into 2022. We expect to build the stock in the fourth quarter and be back on the delivery times for just a few days. During the first half of this year, we have increased the number of staff substantially. It's about 65 employees in the company by the end of the second quarter. About half of them is in the head office in Stavanger and Oslo, and the rest is in our subsidiaries in six different countries. It's very important to be able to recruit the top people, and we are able to do that. The Zaptec brand attract the talents in the industry, and that's also something that we see when we have open positions and recruit people. On the right-hand side, you can see the EV sales for the different countries in Europe. Of course, Norway with 83% plug-in or fully electric cars in the first half. Just a few percentages is left for fossil fuel car sales. In Iceland, it's about 55%, in Sweden about 40%, and the rest of Europe, the continental Europe and U.K. is about 20% and increasing. We will see a significant number of cars that are electrified being sold in these larger countries, and that's the main task for Zaptec to gain a foothold and be there with the best people. I think we are improving, and we have very motivated and competent staff working for Zaptec in the countries where we are about to establish business. To support our staff, we have implemented the BambooHR system in the second quarter. This is the best system for companies like Zaptec, and to build a career for all these people is very high on the agenda for the management of Zaptec. Regarding the future, it's like we have told you in this presentation, it's a strong growth in the markets where we operate. We expect the growth to continue due to the government push for lower emissions, the new electric car models, and also falling battery pack prices. Regarding the batteries, it's a need for more battery factories in Europe, and those are being drawn or built at the moment. That is a very important part of the EV industry to have enough efficient batteries. People would like to charge at home. If they have a possibility to establish a charging point at home, they will do that. In most countries it varies, but most people have access to a parking bay close to where they live. If they have that, they will establish a charging point to charge most conveniently and also with the lowest electricity prices. To sum up, we have a European strategy and we are about to implement this strategy. It means that we will grow, like we have said before, 70% + in revenues annually for the next three years. It's the main markets that we have discussed in this presentation is where we are going to collect our revenues. This is the final slide that we put out. We would like to have questions if you have any. We have some people helping us. If you have any questions. It just popped up and disappeared again. Just ask them. Just read them for us. Okay. The question is, can you elaborate how you will solve the components shortage? Yes. First of all, the shortage that we experienced was just one component. It was a new component designed for the new Pro charger. We have secured the components for large production going forward. We don't see any large risk in this market at the moment. It's a first come, first serve market. The relations between in the value chain is that if you have secured order for a long time period, you will get the quantities before other players. I think placing orders for the whole of 2022 which is a large revenue growth for Zaptec, what we have planned. We have placed these orders and our supplier have placed orders at the component suppliers. That's the best way we can fix it. I think we will see a kind of shift by the end of the year because there is kind of a panic feeling in this market. A lot of players, they're placing more or higher orders to try to get maybe half of the quantities. When you have the supply coming back again, it will be a reduction in the procurement, in the volumes. It will be more available components by the end of the year. I have to say also that if you have a factory in Malaysia and you have to wash down all the equipment between each shift and all of the workers have to be one or two meters in distance, you can only produce less volumes. The COVID-19 will influence the efficiency in the production of components. We see the improvements kind of month-by-month. We don't have any problems with this at the moment. The gross margin in the second half, the question is about what we think about that. That will increase, as we mentioned. We see an increase already and it will continue to increase and we expect to reach our goals of 40% gross margin by the end of the year. We are very optimistic about the development of the gross margin. The problems we had with the component, like we discussed just a few minutes ago, it was because we have a new design on the Pro charger, which makes it more competitive. The outcome is very positive when it comes to competitiveness on that charger. We are sure that we see that the gross margins is picking up and should be in the low 40s by the end of the year and next year it should be around 40%, as we see it. The question is, how many new coworkers are you expecting to employ in order to keep up with growth? That's a very good question. We believe, for instance, in Sweden, it's a company that really is about to be the market leader for multi-family home system, the larger charging systems. They're about five people now. I think they will grow to seven, 10 people in 12 months time. The revenues will be almost on the level as Norway has been historically. The scalability on the subsidiary level, the sales company level, is substantial. We can collect a lot of revenues, sell a lot of chargers. Since the system is so stable, we can add on a lot of chargers without adding more staff. The electricians, they are the voice and the selling department of Zaptec in the market. We train the electricians to be out there and build a business model of Zaptec in the whole country. It's the same model that we have done in Norway. We will add on some more management to be able to manage the whole company. We will also have some more support functions. Like for instance, supply chain management will be more people. We are also looking at systems all the time, trying to scale everything we do. If you look at competitors of this company, it's maybe 200+, 400+ employees. What we are trying to do is to build scalability, have systems, and always offer the best careers for our people without being too conservative when it comes to growth. We see that growing more than, say, 100%-150%, we have to add on overhead and number of staff that might be a little bit chaotic. I think that going forward, maybe if you can have any guess on what number of employees in 12 months' time? Yes, we will increase the employees about 50 person the next 12 months, and the most of them will come in the subsidiary outside Norway in the sales team. Scalability is the keyword. Can we give updated revenue guidance for 2021? It seems that you will beat your 70% goal. That's a question and kind of a meaning. You want to take that one? We will beat the 70% +. That's our best guess today. Yes. I think that we operate in high-growth markets, it's very hard to say the exact guidance for you. We will give a trading update by the end of each quarter. When the quarter is finalized, we will give you a trading update on the revenues. You know the level of the gross margin, then you can do the calculations yourself. Then we have the quarterly result presentations. If we see a big differ from what we have said, like the 70%, we will have to inform you, and we will do that. I think that the 70% + is the best guess at the moment, and we will do our best to kind of make it a plus plus. "Can you tell how much CapEx you are planning to spend over the next three years to make your growth targets? Will you need to raise equity during this period?" We don't need to raise equity to get the organic growth that we are planning for. We are building cash when we are growing. The organic growth, we don't need any more equity. For this year, we expense all the costs that we have related to the growth in our subsidiaries. The only thing we capitalize is the development projects, so the technology projects. We will be profitable even though we expense everything. We have, today, a lot of people in the payroll without creating revenues. I think it's a solid model going forward. We will raise equity if we need it for more acquisition purposes. We are looking at larger markets outside of Europe and in relation to this, it might be so that we will grow with acquisitions and that will be done preferably with equity. We are able also to use other resources of financial loans, et cetera, and bonds. I think with the model we have now, it will be an organic growth story without any dilution. If we need more equity, it will be in relation to larger projects going into the U.S. or acquire a large company. We have the funding for smaller acquisitions as we speak. The larger ones have to be financed, of course, if we need more money to do that. When will the sales in Germany start at this most important market? I would say the first quarter of next year. We are developing and working on being compliant with the calibration laws in Germany. Of course, the market is there today for the single-family home products. The decision process for buying a charger if you live in a single-family home is very easy. You just buy it and install it. In a larger complex, you will have to go through a longer process, and it has to be quite a lot of electric vehicles in the building before you can get the decision. Our experience is that 4%, 5% of all the cars in the parking area, if they are in need of charging, then this market for a kind of system charging start. I think for the Pro, the big market in Germany has not started yet, so we are not late in that respect. Regarding the single-family home product, the Zaptec Go that we offer, we will start selling by the end of this year and increasing month by month in 2022. When we are in compliance with the Zaptec Pro, we will build the solid customer base a little bit more slowly, but also the pricing is higher, the margin is higher in that market, and that is our home turf to say it directly. Zaptec's strategy to grow abroad, we have covered that. It's establish subsidiaries, our own employees, train the electricians, build the distribution channels, have containers for the portal, the cloud solution, so that it will be scalable technically with a lot of chargers. It's the same story as we've done in Norway and the single-family home market that we also talked about. Is it somewhat different? We have to have distribution channels to get the volumes that is in that market. It's only a fraction of the revenues for the Zaptec Go from electricians, maybe 20%-30%, and the rest is electricity companies and other retailers. We are building distribution for both of these products abroad. Yeah, the time is 9:00 A.M., I think we will have a few questions more, and then we finalize, and you can follow up directly with us on email or however you like. One of the questions here now, "What is the expected revenue from NovaVolt in 2021?" It will be about EUR 10 million, the gross revenues for NovaVolt in this year. It's 100% growth company with a very high profitability margin, and it's the market leader for large charging systems in Switzerland. It's a very bright future for that company. We are going to Switzerland now in September to even develop more even higher sales strategies together with partners and together with this company. Yes. Question here: "What is the status of the large Zaptec Go agreement published late March? Which partner is it? When will it be published?" This is an energy company. We will go out in the market when we are selling together with them. It's integrating our system, the API from our system into the service that this company is offering in the market. This is an online energy retailer that is expanding in Europe. To make the launch successful, we would not like to just talk about names to make it a success for the company. This will be released when we have integrated and everything is okay. It will happen in the third quarter. Yeah. We can take maybe one last question before we finalize. If there is any. "What's the next country you will try to establish in?" Yeah. There are opportunities in Europe. We have dealerships in the smaller countries where we see a great potential. We have our own people, our own setup. When there is an early phase or a small country, we will use the dealership model. In Iceland, for instance, we have a very good dealer handling Zaptec in Iceland. Talking about a new big market with as our own people, I think that we will do the research for the U.S. market and make a plan to go to the U.S. since they really need our systems and they have quite high expectation when it comes to electric vehicles the next 10 years. It's a large country. I think that the U.S. market will be researched, and we will do some initial actions for the U.S. market. The Chinese market is even bigger than the U.S. when it comes to electric vehicles, but we will not go that direction after Europe. Of course, it will be some European countries being researched, and we will sell chargers in Finland, we have a dealership and other countries in- It depends on the EV adoption in the different countries. Now we have established subsidiary in the big countries like France and Germany and U.K. Big countries like Italy and Spain is very early with the EV adoption, so we will come back to that. Yeah. Okay. I think we should wrap up. Thank you all for listening, and we'll get back to you with information for an update by the end of the third quarter and before this if we have any stock announcements. Thank you all for listening, being here, and please do not hesitate to contact us if you have further questions. Thank you all. Thank you.